by Kelly Smith-Haley
Fox, Swibel, Levin, & Carroll, LLP

January is almost here, which means diet, exercise, and wellness resolutions aren't far behind. And like many of us, the Equal Employment Opportunity Commission (EEOC) has "wellness plans" on its list of 2015 New Year's resolutions. The Chicago branch of the EEOC recently filed its third lawsuit alleging that an employer-sponsored wellness program violates the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). In filing these lawsuits, the EEOC has implicitly challenged the Affordable Care Act's (ACA) express approval of wellness programs. Read on to find out why this topic isn't a fad you can ignore.

Testing, testing

Honeywell International, Inc., offers its employees and their families a high-deductible health plan (HDHP), which is a self-insured group plan sponsored by Honeywell. Employees who participate in the HDHP have the option of participating in Honeywell's wellness program. The wellness program is designed to inform participants about their health status, encourage improvement of specific health goals, and reduce claim costs.

Employees who participate in the wellness program agree to undergo biometric testing. The biometric tests provide information relating to their blood pressure, body mass index, cholesterol levels, and glucose levels. Employees who earn less than $100,000 and choose to participate in the wellness program become eligible for a health savings account (HSA), and Honeywell agrees to make an annual contribution to the HSAs.

Employees who choose not to participate in the wellness program aren't disciplined or terminated. However, they aren't eligible for HSAs, and they must pay a $500 surcharge that goes toward their annual health insurance contribution. Additionally, employees who refuse to undergo biometric testing are presumed to be tobacco users unless they enroll and participate in a tobacco cessation program, submit a report from their doctor that shows they don't use tobacco, or work with a health advocate to establish they are nicotine-free. Honeywell imposes another $1,000 surcharge on nicotine users (and presumed nicotine users).

Carrot sticks

Under the ADA, employers generally can't require a medical examination or otherwise inquire about whether an employee has a disability unless the examination or inquiry is job-related and consistent with business necessity. There are a few exceptions to this general rule. For our purposes, the most important exception is that the ADA permits employers to conduct "voluntary" medical examinations, including inquiries into medical histories, that are part of an employee health program available to employees at the worksite. The EEOC has stated that a wellness program that includes medical exams and medical inquiries is "voluntary" as long as the employer neither requires participation nor penalizes employees who don't participate.

According to the EEOC, Honeywell's wellness program violates the ADA because it uses an involuntary medical examination—the biometric test—that isn't job-related. The EEOC contends that Honeywell's wellness program isn't voluntary even though employees can choose to participate. According to the agency, the financial incentives are so steep and the surcharges are so penalizing that the employees have no choice but to participate.

For that reason, the Chicago office of the EEOC filed a lawsuit in the U.S. District Court for the District of Minnesota alleging that Honeywell's wellness program violates the ADA and GINA, which prohibits discrimination on the basis of genetic information with respect to health insurance and employment. The EEOC requested an emergency temporary restraining order that would have required Honeywell to stop its wellness program immediately and until the district court rules on the merits of the case.

But Mom said I could

Honeywell argued that the EEOC's position—i.e., its wellness program isn't "voluntary" because it offers steep incentives and imposes surcharges—is outdated in light of the ACA. According to Honeywell, its program strictly complies with the ACA's express approval of surcharges and financial incentives for employees who participate in certain types of wellness programs.

The ACA states that employers that offer wellness programs can provide "rewards" to employees as long as certain other factors are met (which aren't important for purposes of this article). The types of available rewards under the ACA include discounts or rebates of premiums or contributions and the absence of a surcharge.

In light of that language, Honeywell argued that the district court should ignore the EEOC's view that the use of steep incentives and surcharges means wellness programs aren't "voluntary." According to the employer, Congress wouldn't expressly endorse in one federal statute (the ACA) what the EEOC claims is illegal under another preexisting federal statute (the ADA).

The diet starts tomorrow

The district court denied the EEOC's request for an emergency order that would have required Honeywell to stop its wellness program until the district court rules on the ultimate issues (which could be years from now). In its decision, the district court stated that there is great uncertainty about how the ADA, the ACA, and other federal statutes such as GINA are intended to interact.

The district court explained that the EEOC's recent lawsuits highlight the tension between the ADA and the ACA and signal the need for clarity so that corporations are able to design lawful wellness programs. However, the district court didn't decide whether Honeywell's program, which the employer believes complies with the ACA, violates the ADA. Instead, the district court stated it needed more information to make an informed decision and pushed the decision off for another day. The diet, indeed, starts tomorrow. EEOC v. Honeywell International, Inc., Civil No. 14-4517 (D. Minn., Nov. 6, 2014).

Stay well

The Honeywell suit filed in Minnesota is but one of several suits in the Midwest filed by the EEOC's Chicago office. Illinois employers need to understand that even though the ACA promotes incentives and allows for surcharges, it's unclear whether use of those "ewards" will violate the ADA and/or GINA. Until this issue is settled, you should evaluate your wellness programs in light of not only the ACA but also the ADA, GINA, and other federal statutes so that they don't become the next target of an EEOC lawsuit on this topic. In the meantime, we will continue to monitor these issues.

The author can be contacted at ksmithhaley@fslc.com